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Concerned over the low penetration of insurance, the insurance watch dog, Insurance Regulatory and Development Authority has proposed to sell micro-insurance products through chemists, kirana and petrol pumps to increase penetration.

Micro-insurance is product which targets people of low income segment from urban as well as rural areas.In an exposure draft on Micro Insurance Regulations, IRDA said, “In order to broadbase the micro insurance business there is a case to expand the micro insurance agency base by adding few more distribution partners or Individuals.”

The regulator has proposes to allow individual owners of kirana shops, fair price shops, medical shops, petrol pumps,PCOs to be categorized as micro insurance agents. At present some NGOs, Micro Finance Institutions (MFIs), Self Help Groups (SHGs), District Co-operative Banks, Regional Rural Banks, Primary Agricultural Co-operative Societies and individual agents are working as insurance agents.

"Since, these individuals have a physical presence and standing in these specific market segments as those of the existing Standalone Micro Insurance Agents, it is considered that they stand on similar footing along with standalone micro insurance agents," the IRDA said.

Aegon Religare Life launches an online health plan - iHealth
[Posted by: InsuringIndia News on Monday, July 30, 2012 5:47 PM]

Targetting the younger section of the society, one of the private sector insurers Aegon Religare has launched an online health plan – iHealth. Aegon Religare iHealth Plan is a comprehensive health insurance plan that covers 849 surgeries and also offers a fixed-benefit with a smooth claim-settlement process.

Rajiv Jamkhedkar, MD & CEO, Aegon Religare Life Insurance said, “Our customer research showed us that key concerns among buyers of health insurance are - worries about getting the full claim amount, increase in premium in case of a claim and worries about coverage of all surgeries.”

Yateesh Srivastava, Chief Marketing Officer, Aegon Religare Life Insurance said, “The Aegon Religare iHealth Plan is targeted to the 'new age' customer, who prefers a direct and convenient process while buying any financial product.”

This plan is divided into two sub-categories – Gold Plan and Platinum Plan. Under the Gold Plan Sum Assured is Rs 3 lacs whereas under the Platinum Plan it is Rs 5 lacs.

Some of the salient features of the plan are it covers all surgeries except cosmetic surgeries. Cashless facilities equal to the sum assured is provided at more than 3,000 hospitals across the country.

Mr. Jamkhedkar also said the company is planning to launch 4 protection and traditional plans very soon.AEGON Religare Life Insurance (ARLI) is a life insurance joint venture between AEGON, Religare and Bennett Coleman & Company. ARLI launched its pan-India operations in year 2008. AEGON is an international life insurance, pension and investment company whereas Religare is a global financial services group and Bennett, Coleman & Company is largest media house of India.

RBI asks government: don’t control banks from outside
[Posted by: InsuringIndia News on Friday, July 13, 2012 5:42 PM]

The India's central banking institution, Reserve Bank of India, yesterday, invoked for autonomy of public sector financial institutions and banks. The governor of RBI, Mr. Subbarao said the government should not exercise control outside the boards of the state-run banks and financial institutions.

Mr. Subbarao was answering the questions of the audience at the 30th foundation day function of NABARD in Mumbai. He said, “The government ownership mechanism, which is not through the boards but outside the boards is not good governance. One thing for the government could be to show exemplary behaviour of corporate governance and exercise their ownership rights through the board. I think that would be good for all the financial institutions, including NABARD.”

The autonomy of financial institutions in India has been the subject of debate for a while now.“There are questions about how the government will play out its ownership role. This is not restricted to Nabard, it is something which is being played out in a number of institutions including commercial banks,” Mr. Subbarao added.

The government is majority stake holder in 26 public sector banks and financial institutions like IIFCL, IDFC, insurance companies and other PSUs.

IRDA suggests insurers to expand foreign operations
[Posted by: InsuringIndia News on Thursday, July 12, 2012 6:20 PM]

The Insurance Regulatory and Development Authority has suggested Indian insurers to spread their business abroad; as foreign insurers do.

During the speech at a seminar organized by the Indian Chamber of Commerce, Mr. Sudhin Roy Chowdhury, Member (life) of IRDA said, “If foreign companies can come to India in a big way, why can’t we expand our wings abroad? Look at (German insurer) Allianz. Around 60 per cent of their business is from markets outside Germany.”

Further, Mr. Chowdhury said if foreign insurers could come India, form joint-ventures with Indian insurers then why don’t the Indian insurers look at the opportunities abroad? They should also walk out to form joint-ventures in overseas to expand their business.

According to the present law, a foreign partner cannot invest more than 26% in Indian insurance companies. However, there is a bill which permits foreign investors to invest up to 49% in Indian insurance sector is likely to be presented. Government is all set to pass the bill to give a push to Indian insurance sector. And, according to the latest updates, senior BJP leader and former finance minister Mr.Yashwant Sinha has given an indication to support the bill. Once the bill is passed, foreign investors can be able to invest up to 49% in Indian insurance market.

IDBI Federal Life launches an affordable plan ‘Suvidha Savings Insurance’
[Posted by: InsuringIndia News on Thursday, July 12, 2012 6:20 PM]

Private sector life insurer IDBI Federal Life Insurance, on Tuesday, launched a participating endowment plan ‘Suvidha Savings Insurance’.

This plan is very simple and affordable which requires no medical tests. This plan can be bought in 3-easy steps-Select, Sign and Submit. The salient features of the plan are-simple to understand, easy to buy, less documentation and affordable price. The simplicity and less documentation reduce time taken to acquire a life insurance cover. This plan ensures protection of the life insured along with savings.

Under this plan there is a tax benefit for the premiums paid up to a limit of Rs 1,00,000 per annum.In a release, Mr. G.V. Nageshwara Rao, MD & CEO, IDBI Federal Life Insurance said, “Lifesurance Suvidha Savings is a simple and affordable life insurance product that offers a hassle-free issuance process, with no medical tests. The plan is designed to help customers start their long term savings to meet their responsibilities in life.”

IDBI Federal Life Insurance is a joint-venture between three financial institutions- IDBI Bank, Federal Bank and Ageas (formerly Fortis). IDBI is an industrial development bank whereas Federal Bank is a leading private sector bank of India and Ageas is a European insurance giant. In the joint venture, IDBI Bank holds 48% equity while Federal Bank and Ageas hold 26% equity.

"This hassle-free plan is designed to provide a life cover of up to Rs 3 lacs till the age of 65 years with guaranteed additions, plus bonuses that may accrue during the policy term. The plan also insures customers against accidental death during the policy term," said Mr. Aneesh Khanna, Head-Marketing & Product Management, IDBI Federal Life Insurance.

Goa govt; all set to raise health insurance ceiling to Rs 2 lacs
[Posted by: InsuringIndia News on Tuesday, July 10, 2012 7:02 PM]

Goa government is all set to raise health insurance cover ceiling from Rs 60,000 to Rs 2 lacs. The state health minister, Laxmikant Parsekar said today, the government will make over the universal medical insurance scheme covering its population.

According to the state health minister, ICICI Lombard, which has bagged the contract to implement this scheme for entire Goa population, will be approached with the reworked rates.He said, “If ICICI Lombard is okay with the reworked rates, then we will continue the agreement with them or else we will have to re-bid it.”

In the scheme 'Swarnajayanti Arogya Bima Yojna' was launched last year by former Digambar Kamat-led government. In the scheme, it had the provision to empanel private hospitals where cashless health insurance cover up to the sum of Rs 60,000 per family was provided for all diseases.

Mr. Parsekar said the reason behind the raising the current ceiling from Rs 60,000 to Rs 2 lacs is to empanel all hospitals across the state. At the current ceiling, several private practitioners had expressed their unwillingness to endorse the scheme as it had prescribed a little amount for various diseases.

The government has also decided to pay extra remuneration depending on the cases handled by them, once universal medical insurance scheme is implemented.

Government may get support from BJP to raise FDI in insurance
[Posted by: InsuringIndia News on Tuesday, July 10, 2012 7:02 PM]

Government may get support from BJP on much debated FDI raise in insurance if it reaches out to the opposition. The government is willing to raise FDI raise from existing 26% to 49% to push reforms in insurance sector.

In reply to a question, former finance minister and senior BJP leader Mr. Yashwant Sinha said, “We will see. They have to reach out to us with their concrete proposals. We'll look at it. If we find it worth supporting, we will certainly support.”

In an interview with Karan Thapar, Mr. Sinha was replying to a question whether BJP would support the government if it comes out with a proposal that goes up to 49 per cent FDI in the insurance sector the way the BJP-led NDA government had proposed earlier. He replied, “"Well, you are asking me a hypothetical question. When I had discussed it earlier with the then finance minister, he agreed with us that it should be restricted to 26 per cent.”

"They will have to reach out to us", Mr. Sinha replied when asked, if there is room for BJP to support the government if it goes up to 49 per cent in the way the BJP thought of 49 per cent.

It is surprising that during the NDA government, BJP had proposed to raise FDI to 49% in insurance if the balance of 23 per cent equity was given to NRIs, PIOs, OCBs, FIIs, but the largest party of UPA version-2 coalition Congress had opposed it then and demanded 26 per cent FDI instead.

Further, the former finance minister criticized Prime Minister Manmohan Singh. He accused him of being ‘dishonest’ by trying to distance himself from the actions taken by the finance ministers in his Cabinet. He also said the current economic situation in the country is very serious and it is worse than it was in 1999. He blamed current finance minister Pranab Mukherjee and his predecessor P Chidambaram for the situation.

Buying health insurance online; an emerging trend
[Posted by: InsuringIndia News on Friday, July 06, 2012 5:47 PM]

With the increase in number of internet savvy in India, a huge number of people have started preferring to buy almost everything online. Online life insurance policies became very popular last year; now health insurance policies too gaining preference over the offline.

Earlier it was a common practice to research and compare products online but when it came to buying, people prefer to go for the traditional medium which includes an agent. But the mind set of customers are being changed and they don’t hesitate to buy policies online.

According to an expert, so far, the online route was the preferred one for renewals of policies and not purchase. But, it makes sense for customers to complete the entire transaction online given the ease and transparency.

The major benefits of buying policies online over offline are transparency of the products. The benefits offered under the policies can be seen by customers. The second and most important reason is save on premiums. In most of the products, premiums for online products are 25%-50% cheaper. Also, customers have various payment options, such as net banking or credit card, instead of paying by cheque in the case of buying a policy from an agent An ICICI Lombard official says, “While buying a health insurance plan online, the customer can see what is he opting for. It offers transparency.” For ICICI Lombard, 70 per cent of its e-channel business comes from those who buy plans online and also renew it, and the remaining from only renewals.

Mr. Gaurav Garg, MD & CEO, Tata AIG General Insurance, “Our website has seen a strong trend where customers research and buy the products online, which are relatively more standardised structurally and have a lower ticket size like overseas medical and travel insurance.”

Strong growth seen in online term plan sales
[Posted by: InsuringIndia News on Wednesday, July 04, 2012 2:55 PM]

A strong growth is registered in sales of online term plans in recent times. Term insurance, the pure life product which is the cheapest cover plan has found great acceptance in India through online platform. People has started understanding the fact that online route is cheaper than the traditional means. In some online term plans premiums are as low as 50% compared to offline plans.

Mr. Gaurav Rajput, Director (Marketing), Aviva India said, "We have seen a great response to our first online term plan Aviva i-Life, through which we have covered over 22,000 lives in less than a year. It contributes nearly 71% to our pure term plans portfolio (FY 2012). "

Mr. Sanjay Tripathy, EVP (Head Marketing & Direct Channels), HDFC Life said, "Our online term insurance plans sales since launch in December 2011 has grown 182% during the last six months. The volume and customer response has surprised us as well. This can be credited to significant leap in growing awareness about term insurance plan over the last few years.”

Mr. Rituraj Bhattacharya, Head (Market Mgmnt.), Bajaj Allianz also seemed excited about online term plans but he mentioned that in tier 2 and tier 3 markets, the concept of buying large sum assured for protection without maturity benefit is yet to catch on.

Future Generali launches a micro-insurance policy for rural segment
[Posted by: InsuringIndia News on Wednesday, July 04, 2012 2:55 PM]

Private sector general insurer Future General India, yesterday, launched a micro-insurance policy ‘Future Sampoorna Suraksha’ for the rural segment. As its name suggests, it’s a complete protection (Sampoorna Suraksha) policy for the people of rural India. Through this policy, the company aims to provide protections like- hospital cash benefit, personal accident cover, building and furniture, robbery and burglary, farm products, agricultural pump set, cart protection and liability and pedal cycle.

However, the company refused to provide premium option under the policy.Future Generali is a joint venture between India's Future Group and Italy’s Generali Group.

In rural India, insurance penetration is considerably low. It’s far lower than the national average of 4% (both life and non-life together).

Mr. K G Krishnamoorthy Rao, MD & CEO, Future Generali India Insurance said, “It presents a huge untapped opportunity, which can be leveraged with suitable products customised for these markets.”

Further he said,"We are confident that this comprehensive product and its viable price will make a compelling proposition, which will help our partners attract many first-time buyers who would otherwise stay away. We also intend to distribute this product through our bancassurance network.”

Non-life insurers register 18% premium growth in May’12
[Posted by: InsuringIndia News on Tuesday, July 03, 2012 5:09 PM]

As per the data released by the Insurance Regulatory and Development Authority, the Indian non-life insurance sector has registered an overall premium growth of 18.27% in May’12 as compared to the same period in previous year.

In May this year, the all 24 non-life insurers registered a total premium of Rs. 4,880.81 crore an up from previous year of Rs. 4,005.96 crore. The premium growth was higher in state-owned insurers as compared to the private sector insurers. Six state-owned non-life insurers- New India Assurance Company, National Insurance Company, Oriental Insurance Company, United India Insurance Company, Export Credit Guarantee Corporation and Agricultural Insurance Company together wrote a premium of around Rs.2,836 crore as against the remaining 18 private sector insurers who had booked around Rs.2,044 crore.

United India collected the highest premium of around Rs. 773 crore whereas New India stands at the 2nd position in the public sector club with total premium collection of Rs.707 crore in May.

Poor third-party motor insurance rate worries MORTH
[Posted by: InsuringIndia News on Tuesday, July 03, 2012 5:08 PM]

The Ministry of Road Transport and Highways (MORTH) is worried over the low third-party motor insurance. The ministry has ordered all states and union territories to start special drives and to take corrective steps to ensure all the vehicle owners abide by law under the Motor Vehicle Act. MORTH is gathering data to estimate the exact number of wrongdoers.

According to the Motor Vehicle Act, third-party motor insurance is mandatory in India. Running uninsured vehicle on road is a punishable offence under the Motor Vehicle Act and it could leads to serious implications in case the vehicle is involved in an accident. Third-party insurance protects against damage or injury done to another person due to an unfortunate accident.

Regardless of the rule, third-party insurance rate in India is very pathetic. According to the data compiled by general insurance companies, approximately 40-50% of motorbike owners do not bother TPI whereas about 10% of cars and 7% of commercial vehicles run on roads without third-party insurance. “Although the percentage of cars and commercial vehicles without having TPI done are lesser than that of bikes, the number is still significant when it is taken into consideration the sheer number of cars and commercial vehicles plying on the roads,” a senior executive of a general insurance company said.

According to a MORTH official, vehicle owners get the third-party insurance during the time of purchase as the automobile agencies themselves provide the insurance to buyers. “However, the problem starts in the subsequent years when vehicle owners fail to renew the insurance due to either ignorance or some other reasons,” the official added.

India is the fifth largest vehicle producer in the world with having around 10 crore registered vehicles.

Tata AIG Life to be called ‘Tata AIA Life’
[Posted by: InsuringIndia News on Tuesday, July 03, 2012 11:12 AM]

Tata AIG Life Insurance Company, the joint venture between Tata Sons and AIA Group, yesterday, announced that it will like to be called by a new name ‘Tata AIA Life Insurance Company’ now. Following the exit of American International Group (AIG) from the joint venture, Hong Kong-based AIA Group enters in the JV.

Tata AIG Life Insurance Company was first formed in the year’ 2001 as a joint venture between Indian business empire Tata Sons and American International Group. In the joint venture, Tata holds 74% stake whereas its foreign partner AIA holds the rest 26% stake in Tata AIA Life Insurance Company. AIG had the same 26% stake in the joint venture.

According to the current FDI ceiling, a foreign partner cannot have more than 26% stake. Although; government is planning to raise this limit to 49% to give a push to reform in insurance sector. Once the Insurance Laws (Amendment) Bill is passed, a foreign partner can hold stake up to 49% in any insurance company in India.

Speaking on the name change, Mr. Farrokh K Kavarana, Chairman, Tata AIA Life said, “While we make this transition in our name, nothing else will change. The promoters, the distribution network, the teams, the products, the technology and more importantly, our commitment towards putting the customers at the centre of everything we do, remain unchanged.”

Govt. is all set to raise FDI ceiling to 49% in insurance
[Posted by: InsuringIndia News on Tuesday, July 03, 2012 11:12 AM]

The government is all set to raise much discussed FDI ceiling in insurance sector. The cabinet is considering raising present ceiling from 26% to 49% to give a push to reform in insurance sector.

The opposition parties have been opposing the raise. Feeling the heat of opposition, the cabinet in its meeting on 10th May’ 12 had postponed a decision on FDI ceiling in insurance. But once again the cabinet will try to hike the limit to push the reform in the sector. According to a senior official from finance ministry, the cabinet will consider 49% FDI in insurance sector once again in the coming days.

It is important to mention that the standing committee had rejected the government’s proposal to raise FDI ceiling to 49% in insurance in December last year. The committee in its report on the Insurance Laws (Amendment) Bill, 2008, had said the proposal to increase the FDI cap to 49% in insurance sector seems to have been decided upon ‘without any sound and objective analysis of the status of the insurance sector following liberalisation’.

The committee refused there would be any positive impact of greater role of foreign capital in the insurance sector. It also said, “Increased role of foreign capital may lead to the possibility of exposing the economy to the vulnerabilities of the global market ...Flight of capital outside the country and also endangering the interest of the policy holders.”

Although, the panel, headed by ex-finance minister and senior BJP leader Yashwant Sinha had agreed on the need to bring in comprehensive changes in the archaic laws governing the insurance sector.

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